W41October2014

BUSINESS & TECHNOLOGY INNOVATION REPORT

Week 41

2014

Prepared by

Ferhat Ünlükal

10/12/2014

} BUSINESS & TECHNOLOGY INNOVATION REPORT

} 2

BUSINESS & TECHNOLOGY INNOVATION REPORT Week 41

Headlines

Consumer Electronics (CE)

• Samsung Electronics flagged a near 60 percent on-year plunge in its third quarter operating profit.

• North America, with Vizio maintaining pricing for 50-inch units below US$1,000.

• Global 3D TV market will grow at a CAGR of 35.85 percent over the period 2013-2018.

ICT

• Sony also revealed that the $250 Smartwatch 3 will be accompanying its flagship smartphone to the big red network.

• Hewlett-Packard (HP) will split into two companies, HP Enterprise and HP Inc.

• Cisco will establish an $80 million joint venture with TCL Corp to invest in commercial cloud computing services.

• Foxconn Electronics (Hon Hai Precision Industry) has announced that it has acquired 31.974 million shares of Taiwan Mobile.

• About 1,000 workers at a Foxconn plant went on strike.

• Hon Hai plans to boost its research and development capabilities at its headquarters with founder Terry Gou saying up to 5,000 engineers will be hired in two years.

• The Server Virtualization market in the US to grow at a CAGR of 27.72 percent over the period 2013-2018.

• The cloud computing market will be worth $75bn this year.

• Worldwide PC shipments during the three months ended in September totaled 78.5 million units, a 2 percent decline from last year.

• The global smart cities market is growing at a CAGR of 14.0% from 2013 to 2019.

Flat Panel Industry

• Sharp has developed 7.0" tablet device equipped with MEMS-IGZO display.

• Sharp is close to commercializing its first product that uses a MEMS display.

• LCoS market was valued at $148.4 million in 2013, and is expected to reach $458.3 million by 2018.

• Wearable Display market will surge to 800 million units in 2023, up from 54 million in 2014.

Semiconductor Industry

• Samsung will spend 15.6 trillion won ($15 billion) building a chip plant in South Korea.

• Broadcom, one of the founding members of the Open Interconnect Consortium, has left the group over a disagreement.

• Freescale Semiconductor (FSL) introduced an exceptionally versatile and reliable Internet of Things (IoT) gateway reference design.

• Some Taiwan-based LCD driver IC vendors, have begun ramping up shipments of non-LCD driver IC products.

• The indoor location market is expected to grow from $597 million in 2014 to $3961.8 million by 2019.

• The global pressure sensors market is expected to reach USD 9,434.1 million by 2020.


} 3

Software Industry

• Microsoft Corp.(MSFT) has reportedly signed a letter of intent to purchase text analysis tool maker Equivio Ltd.

• Microsoft is actively developing a meeting-room application.

• Google has introduced an experimental Project.

Service Industry

• Vodafone Group Plc. (VOD) is spending $1 billion to upgrade its network and retail stores in India.

• Telefónica has submitted an offer for Brazilian telecom operator GVT worth €6.7 billion (US$9 billion).

Healthcare & Hospitality Industry

• The market for RTLS healthcare technologies is estimated to reach $2,081.05 million by 2020, at a CAGR of 32.9% from 2014 to 2020.

• The electronic medical record market in the Asian region is estimated to grow to $2,328.0 million by 2018, at a CAGR of 9.4% from 2013 to 2018.

Retail and Payment Industry

• VeriFone announced that Phoenix Managed Networks has completed the deployment of VeriFone’s next-generation.

• VeriFone announced RubyCi, an integrated site controller and point-of-sale (POS) solution that combines features of its Ruby2 POS system and Commander Site Controller.

• VeriFone and Sunoco, Inc. announced that VeriFone has been selected as the exclusive media provider for Sunoco’s fueling islands.

• Facebook is all set to launch a new peer-to-peer payment feature within its Messenger app.

• First Data Corporation, announced the launch of First Data Salutes.

• Posiflex Technology Inc. will launch a new revolutionary mobile POS together.

• Macy's is expanding the use of its shopkick ShopBeacon.

• Mobile POS installs are expected to grow by 110% this year as more retailers replace electronic cash registers and POS terminals with mobile devices.

• Mobile proximity payments in the USA, will reach $118 billion, up from $3.5 billion in 2014.


} 4

Consumer Electronics (CE)

Samsung

Financial

• Samsung Electronics flagged a near 60 percent on-year plunge in its third quarter operating profit, as its key smartphone sector continued to struggle in the face of increased competition.

• Operating profit for the July-September period was estimated at 4.1 trillion won ($3.8 billion), down 59.6 percent from the third quarter last year, the company said.

• Sales were estimated at 47 trillion won, down 20.4 percent from 2013.

Samsung’s stock performance

Vizio

50’’ TV prices

• North America, with Vizio maintaining pricing for 50-inch units below US$1,000, according to a report from the China Times.

• The report cited statistics from DisplaySearch stating Vizio will price 50-inch Ultra HD TVs US$998 over the Black Friday period while 50-inch LCD TVs will go for US$548. Samsung Electronics will offer 50-inch Ultra HD TVs for US$1,298 and LG Electronics US$1,399.

• Market observers expect the North America Ultra HD TV market to reach one million units in 2014 followed by

four million in 2015. The market in China is expected to reach nine million followed by 17 million over the same period, the report said.

• Vizio aims to see 10% growth in LCD TV shipments in 2014 and over 50% of panel supply is expected to come from Taiwan makers, the report added.

CE Market

3DTV Market

• TechNavio's analysts forecast the

Global 3D TV market will grow at a CAGR of 35.85 percent over the period 2013-2018.


} 5

ICT Industry

Sony

SmartWatch 3

• Sony also revealed that the $250 Smartwatch 3 will be accompanying its flagship smartphone to the big red network.

• The Sony Smartwatch 3 originally debuted at IFA back in September. It will feature a 1.2-GHz quad-core ARM A7 processor, 512MB of RAM, Bluetooth, NFC and Android Wear (a first for Sony). Sony also equips the Smartwatch 3 with 420 mAh battery, which may offer better longevity than the endurance seen on the Moto 360 (320 mAh battery).

Sony’s stock performance

HP

Spliting into two companies

• Hewlett-Packard (HP) will split into two companies, HP Enterprise and HP Inc., but this will not cause a substantial change to its ODM orders in the short term. But if this is the first step to selling HP Inc. (which will focus on PC and printer sales) eventually, the long-term influence remains to be seen, according to sources with Taiwan-based ODMs.

• The sources pointed out that HP's move, following Sony's decision to sell its PC business, and Toshiba's and Samsung Electronics' downsizing their PC business scales, has again shown

that hardware vendors are facing difficulties trying to achieve growth and are seeing their profits declining.

• HP's desktop orders are outsourced to makers such as Foxconn Electronics (Hon Hai Precision Industry), while notebook orders are given to Quanta Computer, Inventec, Wistron and Compal Electronics. Quanta handles most of HP's consumer notebook assembly and Inventec is in charge of enterprise notebooks, the sources noted.

• HP's servers are outsourced to Foxconn, Inventec, Wistron and Mitac, while printers are manufactured by Kinpo, Cal-Comp and Foxconn, the sources added.

HP’s stock performance

Cisco

JV with TCL for Cloud Computing

• Cisco Systems Inc will establish an $80 million joint venture with Chinese hardware manufacturer TCL Corp to invest in commercial cloud computing services, TCL said in a stock exchange filing on Thursday.

• Cisco will invest $16 million in the new firm, which has not been named and is still being registered, and hold a 20 percent stake, the filing said. TCL will pay $64 million for an 80 percent share. These investments will be made over three stages, each of which will require the approval of both parties. No timeframe for the investments was given.


} 6

Cisco’s stock performance

Foxconn

Acquisition of Taiwan Mobile

• Foxconn Electronics (Hon Hai Precision Industry) has announced that it has acquired 31.974 million shares of Taiwan Mobile (TWM) for a 0.93% stake at NT$93.2 per share and a total of NT$2.98 billion (US$98.5 million) through a venture capital subsidiary.

• According to market analysts, Foxconn's investment in TWM is to enhance cooperation with the 4G mobile communication operator. TWM has acquired a 14.9% stake in 4G licensee Ambit Microsystems - a Foxconn Group company - at NT$2.98 billion and 4G frequency band units 728-733MHz (for upload) and 783-788MHz (for download) from Ambit at NT$3.433 billion.

Foxconn’s stock performance

Stike in China

• About 1,000 workers at a Foxconn plant in southwest China assembling printers and computers for companies

including Hewlett-Packard Co. went on strike for several hours this week demanding higher pay.

• The Taiwan-based company, formally known as Hon Hai Precision Industry Co., said the workers walked off the job for four hours Wednesday at its production site in Chongqing. About 20 workers went on strike but further details on that stoppage weren’t available.

5000 engineers within 2 years

• Taiwan's tech giant Hon Hai plans to boost its research and development capabilities at its headquarters, with founder Terry Gou saying up to 5,000 engineers will be hired in two years, local media reported Sunday.

SoftIron

ARM BAsed Server Motherboard

• SoftIron(R) announced it has commenced shipping of its 64-bit ARMv8-based enterprise-grade server motherboard at the 2014 IP Expo event taking place in London, UK on October 8-9, 2014.

• The SoftIron APM6408.2 server motherboard introduces technology partner Applied Micro Circuits Corporation's (AMCC) 64-bit ARM-based X-Gene(TM) Server on a Chip(R) solution to the data centre and high performance computing markets. IP Expo attendees can discuss the technology first-hand with SoftIron at stand Pod2V4 of the Futures Den.

ICT Market

Server Virtualization Market

• Server virtualization is the replication of multiple server instances catering to different computing needs of the enterprises on a single server hardware. Every instance of the server


} 7

being replicated on the physical server acts as an individual server which increases the performance of the server infrastructure. The computing resources are centrally pooled at the server and allocated to the various computing services being provided through the server. The computing resources are replicated during the execution of the applications. The server capacity is used to its optimal level by adopting server virtualization solutions.

• The analysts forecast the Server Virtualization market in the US to grow at a CAGR of 27.72 percent over the period 2013-2018.

Cloud Computing

• The cloud computing market will be worth $75bn this year. It has grown exponentially over the last 5 years. Cloud computing continues to gain acceptance in business, enterprise and consumer markets.

PC Shipments

• IDC estimates worldwide PC shipments during the three months ended in September totaled 78.5 million units, a 2 percent decline from last year. Gartner pegged the worldwide sales at 79.4 million units, a decrease of less than 1 percent.

• This marks the ninth time in the past 10 quarters that worldwide PC shipments have dropped, a slump driven by the growing popularity of mobile devices for work, entertainment, information and communications.

• The downturn has been easing now that most people who wanted a tablet computer and could afford to buy one have done so, particularly in the U.S. That phenomenon has been hurting Apple Inc., where iPad shipments fell 13 percent in the first half of the year.

The Global Smart City Market

• The global smart cities market is growing at a CAGR of 14.0% from 2013 to 2019. It should reach an overall value of US$1,265.85 billion in 2019; it was valued at $506.78 billion in 2012. All facts and statistics have been compiled using the research report titled "Global Smart Cities Market - Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013 - 2019", by Transparency Market Research.


} 8

Flat Panel Industry

Sharp

MEMS IGZO Display

• Sharp has developed 7.0" tablet device equipped with MEMS-IGZO display for the first time in industry, and will commercialize the product mainly targeting Japan's B2B market in the first half of 2015.

Sharp’s stock performance

MEMS Display

• Sharp is close to commercializing its first product that uses a MEMS display -- a new type of flat-panel display that boasts deeper and richer colors than traditional LCD screens and lower power consumption.

• The screen was developed over the last three years with Qualcomm subsidiary Pixtronix and Sharp hopes it will one day replace LCD screens in portable devices.

• That's a big deal for both Sharp and Qualcomm. Sharp is a market leader in LCD and has pioneered numerous innovations in the technology while Qualcomm has been trying to popularize MEMS for several years. Qualcomm has fitted a MEMS display in its prototype Toq smartwatch.

• The way MEMS displays control the light from each pixel is fundamentally different than the way LCD displays work.

Flat Panel Market

European LCoS Display Market

• The European Liquid Crystal on Silicon (LCoS) display market report defines and segments the concerned market in Europe with analysis and forecast of revenue. This market was valued at $148.4 million in 2013, and is expected to reach $458.3 million by 2018, at a CAGR of 25.3% from 2013 to 2018.

Wearable Display Market

• From a projected $300 million this year, industry revenue will climb more than 80 percent annually for at least four more years as high resolution and color displays are increasingly adopted in devices. By 2023, the market will be worth some $22.7 billion.

• In terms of shipments, the market will surge to 800 million units in 2023, up from 54 million in 2014.


} 9

Semiconductor Industry

Samsung

Building a Chip Plant

• Samsung Electronics Co. (005930) will spend 15.6 trillion won ($15 billion) building a chip plant in South Korea as it heads for the roughest quarterly result in years amid competition from Apple Inc. and Xiaomi Corp. smartphones.

Broadcom

Leaving from OIC

• Broadcom, one of the founding members of the Open Interconnect Consortium, has left the group over a disagreement on how to handle intellectual property, according to a source involved on the OIC. The standards group was formed this summer as a competitor to Qualcomm’s efforts to push AllJoyn as a device-to-device protocol that would help identify and assess the capabilities of connected devices.

Broadcom’s stock performance

Freescale

IoT

• Freescale Semiconductor (FSL) introduced an exceptionally versatile and reliable Internet of Things (IoT) gateway reference design supporting a broad array of IoT applications

including building/home management, smart cities, networked industrial services and other applications where performance and reliability are critical.

• Designed in collaboration with Freescale manufacturing partner TechNexion, the reference design leverages the proven security, class-leading efficiency, advanced virtualization support and rich set of peripherals of the award-winning QorIQ LS1021A processor, which has reached volume sampling and is now available for ordering.

Freescale’s stock performance

Semiconductor Market

Ramping up shipments of Non LCD Driver IC

• Some Taiwan-based LCD driver IC vendors, including Himax Technologies, Sitronix Technology and ILi Technology (Ilitek), have begun ramping up shipments of non-LCD driver IC products, which are expected to contribute significantly to sales and profit growth for the companies in 2014, according to industry sources.

• Himax has been ramping up shipments of its LCOS modules to international brands after it managed to ship the modules to Google for Google Glass, said the sources.

• Himax has also been landing more orders for its CMOS sensors, touch-controller ICs and TV ASIC devices, the sources added.

• Sitronix, which has been focusing on STN driver ICs, has significantly


} 10

ramped up shipments of its ambient light sensors and accelerometers since the second half of 2013.

• Sitronix has also seen its gross margin and profitability swing back to a growth track, pushing its share price to a three-year high recently, indicated the sources.

• Meanwhile, Ilitek's touch-controller ICs have continued to gain ground in China's smartphone and tablet sectors, as Novatek Microelectronics is likely to double shipments of its TV chips in 2014, said the sources.

Indoor Location Market

• The indoor location market is expected to grow from $597 million in 2014 to $3961.8 million by 2019, at an estimated Compound Annual Growth Rate (CAGR) of 46.0% from 2014 to 2019. Key players in this market include Apple, Broadcom, Cisco, Ericsson, Google, Nokia, Microsoft, Motorola, Qualcomm and Siemens.

The Global Pressure Sensors Market

• The global pressure sensors market is expected to reach USD 9,434.1 million by 2020, according to a new study by Grand View Research, Inc. Favorable regulations including the U.S. government’s directive aimed at mandatory installation of Tire Pressure Monitoring Systems (TPMS) in vehicles are expected to be critical for market development.

Software Industry

Microsoft

Acquisition of Equivio

• Microsoft Corp.(MSFT) has reportedly signed a letter of intent to purchase Israel-based text analysis tool maker Equivio Ltd.

• According to The Wall street journal, the deal, which has not been confirmed by either party, could cost Microsoft around $200 million.

• Equivio and Microsoft’s relationship dates back to 2006. Equivio has been working with Microsoft Technologies, which includes the likes of Windows XP, SQL Server and SharePoint Serve.

• The Israel-based company fabricates text-analytics products which are used for legal and compliance e-discovery tasks. Its core product is Zoom – "a court-approved machine learning platform for the legal area". Zoom uses machine learning algorithms that simplify samples of texts marked as appropriate to the issue at hand, to apply the sorting logic to groups of texts, such as legal documentation.

Microsoft’s stock performance

Meeting Room Applications

• Microsoft is actively developing a meeting-room application designed to streamline the entire process, including sharing data and recognizing participants, according to company co-founder Bill Gates.


} 11

Google

IoT without dedicated app

• Google has introduced an experimental project involving allowing users to interact with IoT objects without the need to install a dedicated app.

Google’s stock performance

Service Industry

Vodafone

Upgrading network and reseller in India

• Vodafone Group Plc. (VOD) is spending $1 billion to upgrade its network and retail stores in India as it counts on surging data use to drive growth in a market where the average customer spends about $3 a month.

Vodafone’s stock performance

Telefonica

Acquisition of GVT

• Telefónica has submitted an offer for Brazilian telecom operator GVT (Global Village Telecom) worth €6.7 billion (US$9 billion), as it seeks to build up its business in Brazil by integrating mobile and fixed broadband with pay-TV services.

Telefonica’s stock performance


} 12

Hospitality&Healthcare Industry

Hospitality & Healthcare Market

RTLS Healthcare Market

• The market for RTLS healthcare technologies is estimated to reach $2,081.05 million by 2020, at a CAGR of 32.9% from 2014 to 2020.

• RTLS solutions is a system that allows real time tracking of assets and personnel that are tagged with active RFID tags with the help of different technologies such as RF signals, Wi-Fi, UWB, Infrared, and other wireless technologies. The tracking of resources in a hospital facility is a major and long-standing concern in the healthcare industry as it directly affects the operational cost and efficiency of the staff. Hence, with the several wireless technologies that can provide the real time tracking, hospitals now have this opportunity to use these technologies to manage and control their assets and staff for enhanced operational efficiency, workflow optimization, and patient satisfaction.

The Asian Electronic Medical Record Market

• The Asian Electronic Medical Record (EMR) market report defines and segments the concerned market in Asian with analysis and forecast of revenue. The electronic medical record market in the Asian region is estimated to grow to $2,328.0 million by 2018, at a CAGR of 9.4% from 2013 to 2018.

Retail and Payment Industry

Verifone

Cooperation with Phoenix

• VeriFone Systems, Inc. (PAY), announced that Phoenix Managed Networks has completed the deployment of VeriFone’s next-generation IntelliNAC i6 network access controller to Phoenix’s PCI compliant transactions network. IntelliNAC has been certified by select payment processors on the Phoenix network and is now processing nearly one hundred million transactions a month.

Verifone’s stock performance

Integration with Ruby 2

• VeriFone Systems, Inc. (PAY), announced RubyCi, an integrated site controller and point-of-sale (POS) solution that combines features of its Ruby2 POS system and Commander Site Controller. The solution will enable average-sized convenience stores and petroleum retailers to more efficiently manage their POS, payment and fueling systems and prepare their payments infrastructure for EMV.

Cooperation with Sunoco

• VeriFone Systems, Inc. (PAY) and Sunoco, Inc. announced that VeriFone has been selected as the exclusive media provider for Sunoco’s fueling islands. VeriFone will provide Sunoco with cutting-edge dispenser card


} 13

readers that have integrated video screens and dynamic streaming content. These payment terminals will enhance the fueling experience for Sunoco’s customers and provide a cost-efficient EMV strategy for Sunoco’s growing network of branded retailers.

Facebook

Peer to Peer Payment

• Facebook is all set to launch a new peer-to-peer payment feature within its Messenger app, allowing users to quickly and easily transfer money to each other.

• Facebook has yet to officially launch the app but Stanford computer science student Andrew Aude discovered that the system is already in place on the company's iOS app - it just needs to be switched on.

Facebook’s stock performance

First Data

First Data Salutes

• First Data Corporation, the global leader in payment technology and services solutions, announced the launch of First Data Salutes. First Data Salutes is the company-wide military engagement strategy aimed at helping the veteran-owned business community and service members and their families transitioning to civilian careers.

• This November, in honor of Veterans Day, First Data will offer special pricing

on Clover™ Station, InsighticsSM and Perka™ products, which will help veterans grow their businesses and serve their clients. First Data will also offer free payment processing on Veteran’s Day for current veteran-owned clients who are certified by the U.S. Department of Veterans Affairs.

Posiflex

Mobile POS solution

• Posiflex Technology Inc., a world leader in the design and manufacture of POS touch screen terminals and peripherals, will launch a new revolutionary mobile POS together with its first Middle East & North Africa (MENA) office in Dubai to coincide with the Taiwan-based company’s participation in GITEX Technology Week 2014.

Posiflex’s stock performance

Macy

ShopBeacon Technology

• Macy's is expanding the use of its shopkick ShopBeacon technology to all its locations nationwide. The mobile location-based technology, which is built upon Apple's iBeacon, will be placed in departments throughout its retail stores and will allow users to take advantage of more personalized rewards and discounts.


} 14

Macy’s stock performance

Retail and Payment Market

US Mobile POS market

• Software companies Square and Epicor lead the fast growing Mobile POS Software market in North America according to new research from IHL Group, a global retail research and advisory firm. Mobile POS installs are expected to grow by 110% this year as more retailers replace electronic cash registers and POS terminals with mobile devices.

US Mobile Proximity Payment Market

• By 2018, mobile proximity payments in the USA, which include payments made using a phone to make a physical transaction at the point of sale, will reach $118 billion, up from $3.5 billion in 2014, according to eMarketer.

References

Flipboard

• if you want to reach the details of the news in the report, you can follow the recent report on web via https://flipboard.com/profile/ferhatunlukal and/or download flipboard application from Apple store, Google Play, Windows Store and Blackberry World and reach all reports and details on your smart mobile devices.